Daimler revs up profits on record sales

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German automaker Daimler said Thursday that its net profit rose by 8.0 percent to €6.495 billion ($8.8 billion) in 2012 on the back of record unit sales and revenues.

"The past financial year was overall a strong year for Daimler. We achieved new records for unit sales and revenue at both the group and Mercedes-Benz Cars," said chief executive Dieter Zetsche.

Revenues rose by 7.0 percent to €114.3 billion and the group sold a total 2.198 million vehicles worldwide, 4.0 percent more than in the previous year.

"Notwithstanding our success... it is a fact that we did not reach our own targets for earnings and profitability," Zetsche cautioned.

In fact, underlying profits, as measured by earnings before interest and tax (EBIT), slipped by 2.0 percent to €8.615 billion. EBIT was actually down in all divisions, but Mercedes-Benz Vans saw the biggest drop of 35 percent while underlying profit at Mercedes-Benz Cars fell by 15 percent to €4.389 billion.

"To ensure that our future growth is even more profitable, we have implemented detailed measures in all divisions that will further increase our efficiency," CEO Zetsche said.

In the fourth quarter alone, net profit soared by 32 percent to €2.359 billion and EBIT rose by 7.0 percent to €2.321 billion on a 3.0-percent increase in revenues to €29.83 billion.

Fourth-quarter units sales were little changed at 597,041 vehicles.

Daimler said it would propose an unchanged dividend of €2.20 per share for shareholders for 2012. Looking ahead, Daimler said it assumed group revenue would "continue growing in the years 2013 and 2014."

In regional terms, Daimler said it is pencilling in above-average growth rates in emerging markets and in North America.

Daimler said it expected developments in major markets to at first remain weak in the first half of 2013, and "therefore anticipates a weaker development of earnings in the first half of the year compared with 2012."

However, with the launch of new models and the increasing effects of efficiency measures, "earnings are expected to improve in the second half of 2013 compared with the level of the first half," it said.

"On the basis of the anticipated recovery in the second half of the year, Daimler currently assumes that group EBIT from the ongoing business in 2013 will reach the magnitude of the prior year," Daimler said.